Onshore Versus Offshore—Which Is Better?

In reaching the goal of maintaining a company resistant to the adverse crisis, the main dilemma is finding the right people for the right job at the right time. But with offshore versus onshore outsourcing systems, which one suits your business format better? 

The key difference of offshore and onshore outsourcing is that offshore means setting up a remote staff to perform your office jobs from their home countries. This system lets companies enjoy equal expertise but with lower labor costs. On the other hand, onshore means giving work to people or organizations residing in the same country as you. 

Onshore Outsourcing

A traditional approach to talent acquisition, onshore is the go-to system of various businesses and organizations. But is it still the best solution for today’s business demands?

PROS

1. Ability for in-person collaboration.

Although the popularity of telecommunication is evident nowadays, it is still so much easier to collaborate face to face than online, since communicating your wants, needs, and expectations happen where people can quickly jump in and exchange ideas and methods. Also, even when the team members are located in different areas or cities, a close proximity is much easier and cheaper to deal with rather than having to travel abroad to meet with a team.

2. Ease of communication.

Having a team on board in the same office or location eases communication since there is no need to battle with time differences in conversations (clarifications, suggestions, recommendations, etc.), making discussions a lot easier and more timely. 

3. Less cultural differences.

Hiring onshore also eases the burden of holidays and off-work schedule differences that may lead to project delays. Since the calendar for both the company and the team is synchronized, project schedules and deadlines run more smoothly. Also, new customs and cultures are out of the picture as well.

CONS

1. More expensive

Assuming that you’re a company from a developed country, onshore talent acquisition can be more expensive since you hire from your own homebase, in contrast to offshore outsourcing, which usually deals with developing countries.

2. Small pool of experts

Because of the limited scope of where you’re hiring, onshore outsourcing only opens you to domestically available talents.

Offshore Outsourcing

As a revolutionary way of getting skilled resources, offshore is a huge risk most companies are willing to take. However, could it be good enough to compete with tradition?

PROS

1. Cost savings

Hiring offshore means hiring skills and expertise from countries with lower labor cost but with the same quality output as onshore, so you can expect the same expertise for a lesser expense.

2. Access to specialized expertise

Acquiring an offshore team also means getting the opportunity to create a team of expertise that are especially picked to compensate for your business needs. Because the scope is widened to many countries aside from yours, you get to have more options to choose from, ensuring you get the best of the best.

3. Improved focus on core business tasks

Getting an offshore team frees up resources so that focus is redirected to the core of the business, which ultimately leads to an increase of sales. By casting tasks offshore, your home resources can use their freed-up time driving revenue and making the company grow.

CONS

1. Logistical challenges

Time zone differences are a challenge that may lead to project delays, backlogs, and slow communication. Because you’re most likely dealing with someone on the literal other side of the world, responses and turn-around time may not always be as fast as you wanted.

2. Public image concerns

This especially concerns if you’re a US company. According to a domestic labor opinion poll, between 76% to 95% of the Americans surveyed saw offshoring as a reason the US economy was struggling. So in a nutshell, Americans have a negative view of the outsourcing practice. It is best to be prepared for the potential negative feedback, if ever.

Conclusion

In truth, a company can benefit from both offshore and onshore talent acquisition - either one or the other or both; this is seen by the fast rise of offshore companies and the still-unwavering presence of onshore acquisition. But in the face of a pandemic and post-pandemic world, where cost-cutting is generally the top priority, one can greatly take advantage of an offshore company. It is a wise way to save financially while keeping your business up and running and ready to compete globally.

The Philippines is a spectacular choice in finding the right offshore company, where, as it happens, RipeConcepts is also located—specifically in Cebu, the best city to form your offshore team in the country.